While the big biotech Gilead Sciences has yet to outline its sales plan for the first effective
The experimental antiviral called remdesivir was authorized for emergency use in the US on Friday, after a trial showed patients on the drug recovered 31% faster than those on a placebo. That translates to shaving four days off the typical hospital stay among these patients. It is the first drug to show a clinical benefit for COVID-19 patients in a high-quality randomized study.
The Institute for Clinical and Economic Review (ICER) is a Boston-based nonprofit that analyzes drug pricing. The pharma industry regularly clashes with ICER, criticizing its models for being too rigid. The group often finds drugs to be overpriced compared to their value in the healthcare system.
But in the case of remdesivir, ICER said Friday a price of up to $4,500 per treatment course is justified for remdesivir. The organization cautioned its findings are based on preliminary data that may change over time.
ICER's analysis is focused on list prices for drug, which do not take into account rebates or discounts offered by drug companies.
"We are releasing these estimates now, despite the fact that the evidence is highly uncertain and evolving, because now is the time when the public and policymakers should be actively debating how to link pricing to an overall platform to develop treatments for COVID-19," said Steven Pearson, ICER's president, in a statement. "The consequential discussion about the tradeoffs and priorities involved with different pricing approaches cannot wait."
But the California biotech has called it too early to set a long-term pricing strategy. So far, the company pledged to donate its current supply of remdesivir, which amounts to 140,000 treatment courses. The pricing question has become a top uncertainty among many investors and Wall Street analysts.
"The fact that ICER is typically conservative in all their analyses, and yet they can justify up to $4,500, seems pretty interesting," Jefferies biotech analyst Michael Yee wrote in a Sunday note to investors.
Using a placeholder of a $1,000 price, Yee estimated Gilead could make $1 billion on remdesivir by the end of 2020 if it sells 1 million treatment courses in the US and internationally. A $1,000 pricetag is "pretty reasonable" in the context of modern drug pricing, the analyst said.
Gilead has pledged it will donate its current supply of remdesivir, which amounts to about 140,000 treatment courses. CEO Daniel O'Day said Sunday the drug should start reaching patients within the next few days.
Remdesivir is given as a 10-day IV infusion and has only been tested in hospitalized COVID-19 patients. The company is also researching ways to administer the drug subcutaneously or through inhalation but has not provided any timetables on those efforts.
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